DEF 14A of Newmarket Corp
Filed Mar 12, 2025 · FY20240001193125-25-052416
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS The Nominating and Corporate Governance Committee has recommended to our Board of Directors, and our Board of Directors has approved, the persons named below as nominees for election to our Board of Directors. Each of the nominees presently serves as a director. Proxies will be voted for the election as directors for the ensuing year of the persons named below (or if for any reason unavailable, of such substitutes as our Board of Directors may designate). Our Board of Directors has no reason to believe that any of the nominees will be unavailable to serve. The below matrix summarizes, among other characteristics, the principal skills and experience that the Nominating and Corporate Governance Committee considered for each director nominee when evaluating that nominee’s experience and qualifications to serve as a director. Additional information about each nominee’s background, business experience and other matters, as well as a more fulsome description of how each nominee’s experience qualifies him or her to serve as a director of the company, is provided in the disclosures about each nominee that follow the below matrix.
ELECTION OF DIRECTORS
| | Mark Gambill | Bruce Gottwald | Thomas Gottwald | Hiter Harris | James Rogers | Lilo Ukrop | Ting Xu | | Skills and Experience | | | | | | | | | Leadership | | | | | | | | | CEO/Senior Exec/Leader of Significant Business Operations | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | | Entrepreneurship | ✓ | | | ✓ | ✓ | ✓ | ✓ | | Science/Technology/Engineering/Math | | ✓ | ✓ | ✓ | ✓ | ✓ | | | Financial/Financial Accounting | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | | Global Business/International Affairs | ✓ | ✓ | ✓ | ✓ | | | ✓ | | Environmental, Health and Safety | | ✓ | ✓ | | ✓ | | ✓ | | Mergers & Acquisitions | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | | Corporate Governance/Ethics & Compliance | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | | Demographics | | | | | | | | | African American/Black | | | | | | | | | Asian/Pacific Islander | | | | | | | ✓ | | White/Caucasian | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | | | Hispanic | | | | | | | | | Native American | | | | | | | | | Gender | | | | | | | | | Male | ✓ | ✓ | ✓ | ✓ | ✓ | | | | Female | | | | | | ✓ | ✓ |
ELECTION OF DIRECTORS
Mark M. Gambill; age 74; director since 2009; co-founder of Cary Street Partners (financial advisory and wealth management firm) and currently Chairman Emeritus, having previously worked for Wheat First Securities from 1972, including serving as chairman of the underwriting committee, until it was sold to First Union Corporation (now Wells Fargo & Company) in 1998. Mr. Gambill also previously served as a director of Speedway Motorsports, Inc., including as chairman of the Audit Committee. Mr. Gambill brings to the Board of Directors over thirty-five years of involvement in the capital markets. Mr. Gambill also adds to the Board of Directors his entrepreneurial and financial expertise as well as his board and board committee experiences as a director of other public companies. Bruce C. Gottwald; age 91; director since 1962; after having served as Chairman of NewMarket and its predecessor Ethyl Corporation for approximately twenty years, Mr. Gottwald stepped down as Chairman on July 29, 2014 and agreed to continue serving as a Director. Mr. Gottwald also previously served as Chief Executive Officer of Ethyl Corporation. From 1998 through 2004, Mr. Gottwald served as an independent director of CSX Corporation. As the former Chief Executive Officer of Ethyl Corporation and long-time Chairman of the company, Mr. Gottwald contributes to the Board of Directors key operational and leadership experience with the company and extensive knowledge of the chemical industry and history of the company. His background and experience enable him to add institutional and industry insight to Board discussions. Thomas E. Gottwald; age 64; director since 1994; Chairman of the Board since July 29, 2014; President and Chief Executive Officer of NewMarket since March 3, 2004, having previously served as President and Chief Executive Officer of Ethyl Corporation from June 1, 2001 through June 30, 2004 and President and Chief Operating Officer of Ethyl prior thereto. As President and Chief Executive Officer of the company, Mr. Gottwald brings to the Board of Directors knowledge of the company’s operations and history as well as expertise regarding the industry as a whole. H. Hiter Harris, III; age 64; director since 2015; co-founded Harris Williams in 1991, where he serves as Founder and Chairman Emeritus. In 2022, Mr. Harris co-founded Cap91 Partners, LLC, a private equity firm investing in minority, sponsor backed co-investments, where he serves as Managing Director. Having advised on more than 200 mergers and acquisitions transactions at an international investment banking firm focused on the middle market, Mr. Harris brings to the Board of Directors a wealth of transactional experience and financial expertise, as well as significant knowledge of middle market companies. James E. Rogers; age 79; director since 2003; former chairman of BackOffice Associates, LLC (provider of SAP data quality, migration and governance solutions); previously served as President of SCI Investors Inc. (private equity investment firm) until January 1, 2011. Mr. Rogers was CEO of Specialty Coatings Inc. from 1991 to 1993 and an executive of James River Corporation from 1971 to 1993. Mr. Rogers brings to the Board of Directors leadership experience and expertise regarding the management of public companies due to his board and board committee experience and his previous membership on the boards of Caraustar Industries, Inc., Wellman, Inc., Cadmus Communications, Owens & Minor, Inc. and Chesapeake Corporation. Lilo S. Ukrop; age 63; director since 2023; served as Market Development Manager at Tredegar Corporation for three years, as well as Operations Manager at McIlhenny Company, the manufacturer of Tabasco Brand Pepper Sauce, for two years. Ms. Ukrop began her career as a reservoir engineer at Exxon. She is an active leader in Virginia, including diverse non-profit board experience, and she teaches Reading Seminars in Management at the Darden School of Business. Ms. Ukrop brings to the Board of Directors a valuable business and leadership skillset gained through her broad experience, including in areas particularly relevant to our business. Ting Xu; age 59; director since 2022; Founder and Chairwoman of Evergreen Enterprises (manufacturer and wholesaler of home and garden décor items) since 1993. Ms. Xu is also an active leader in the Richmond business and civic community, serving in leadership roles at several community organizations. From her business and community experience, Ms. Xu brings to the Board of Directors significant entrepreneurial and leadership capabilities, as well as a business to consumer perspective and expertise in global logistics. Our Board of Directors unanimously recommends that you vote “FOR” each of the nominees listed above.
Board of Directors
Board of Directors Our company is managed under the direction of our Board of Directors, which has adopted Corporate Governance Guidelines to set forth certain corporate governance practices. The Corporate Governance Guidelines are available on our website at http://www.newmarket.com under Investor Relations, Corporate Governance.
Compensation of Directors
Compensation of Directors Our Board determines the form and amount of compensation for our non-employee directors based on the recommendation of the Compensation Committee, which conducts an annual review of compensation for our non-employee directors. As part of its review, the Compensation Committee considers, among other factors, whether a director’s independence will be jeopardized (1) if director compensation and perquisites exceed customary levels, (2) if our company makes charitable contributions to organizations with which a director is affiliated or (3) if our company enters into contracts with, or provides other indirect forms of compensation to, a director or organization with which a director is affiliated. The following table and related footnotes present information relating to total compensation of our non-employee directors for the fiscal year ended December 31, 2024. Mr. Thomas E. Gottwald, our President and CEO, does not receive any compensation for his services as Chairman, other than a retirement benefit as described below under “—Directors’ Retirement Benefits,” the change in the actuarial present value of which is disclosed in the Summary Compensation Table on page 24.
Compensation of Directors
| Name | Fees Earned or Paid in Cash($) | Stock Awards (1)($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Non- qualified Deferred Compensation Earnings (2)($) | All Other Compensation ($) | Total ($) | | Mark M. Gambill | $130,000 | $100,468 | $0 | — | 0 | $230,468 | | Bruce C. Gottwald | 100,000 | — | 0 | $0 | 0 | 100,000 | | H. Hiter Harris | 125,000 | 100,468 | 0 | — | 0 | 225,468 | | James E. Rogers | 120,000 | 100,468 | 0 | — | 0 | 220,468 | | Ting Xu | 125,000 | 100,468 | 0 | — | 0 | 225,468 | | Lilo S. Ukrop | 100,000 | 100,468 | 0 | — | 0 | 200,468 |
Compensation of Directors
| (1) Represents the aggregate grant date fair market value of the 193 shares of our common stock awarded to each non-employee director on July 1, 2024, computed in accordance with FASB ASC Topic 718. For a description of this plan, see “— Annual Stock Retainer” below. |
Compensation of Directors
| (2) Represents the aggregate change in the actuarial present value from January 1, 2024 to December 31, 2024 of the retirement benefits for eligible directors described under “Directors’ Retirement Benefits” below. Of the directors listed in the table above, only Mr. Bruce C. Gottwald is eligible for this benefit. The actuarial present value is calculated using the same assumptions we use for financial reporting purposes, except that normal retirement age is age 60. The discount rate for 2024 was assumed to be 5.875%. Decreases in actuarial present value are reported as $0. The actual decrease for Mr. Gottwald was $483. |
Directors and Executive Officers
Directors and Executive Officers The following table sets forth as of February 24, 2025, the beneficial ownership of NewMarket common stock by all of our directors, our Chief Executive Officer and our other executive officers listed under “Compensation Discussion and Analysis—Executive Summary” on page 15 and all of our directors and current executive officers as a group. Unless otherwise indicated, each person listed below has sole voting and investment power over all shares beneficially owned by him or her.
Directors and Executive Officers
| Name of Beneficial Owner or Number of Persons in Group | Number of Shares with Sole Voting and Investment Power | Number of Shares with Shared Voting and Investment Power | Total Number of Shares | Percent of Class (1) | | Mark M. Gambill | 3,572 | 276(2) | 3,848 | | | Bruce C. Gottwald | 913,339 | 38,718(3) | 952,057 | 10.0% | | Thomas E. Gottwald | 579,385 | 25,754(4) | 605,139 | 6.4% | | H. Hiter Harris, III | 1,938 | — | 1,938 | | | Bruce R. Hazelgrove, III | 235,986 | 7,559 | 243,545(5) | 2.6% | | Bryce D. Jewett | 2,406 | — | 2,406 | | | Brian D. Paliotti | 6,076 | — | 6,076 | | | James E. Rogers | 3,596 | — | 3,596 | | | William J. Skrobacz (6) | 1,967 | — | 1,967 | | | Lilo S. Ukrop | 193 | — | 193 | | | Ting Xu | 715 | — | 715 | | | Directors and executive officers as a group (12 persons) | 1,748,211 | 65,418 | 1,813,716 | 19.1% |
Directors and Executive Officers
| (1) Except as indicated, each person or group owns less than 1% of NewMarket common stock. |
Directors and Executive Officers
| (2) Such shares are owned jointly by Mr. Gambill and his wife. |
Directors and Executive Officers
| (3) Mr. Bruce C. Gottwald disclaims beneficial ownership of all 38,718 shares. |
Directors and Executive Officers
| (4) Mr. Thomas E. Gottwald disclaims beneficial ownership of 5,087 of such shares which are owned by his wife. |
Directors and Executive Officers
| (5) Includes 217,929 shares held in trusts for the benefit of non-family members over which Mr. Hazelgrove serves as sole or joint trustee. |
Directors and Executive Officers
| (6) As previously disclosed, Mr. Skrobacz stepped down from his role as Vice President and Chief Financial Officer effective December 31, 2024 and plans to retire from NewMarket in 2025. He is not included in the group total. |
2024 Compensation Decisions
| • | We awarded our NEOs annual cash bonuses consistent with our financial performance and each NEO’s individual performance. |
2024 Compensation Decisions
| • | We believe our executive compensation program continues to reflect good corporate governance practices. We have not entered into long-term employment agreements or change in control agreements with any of our NEOs and do not provide significant perquisites. We have a clawback policy that permits us to recover incentive compensation paid to executives in connection with a restatement of the Company’s financial statements. |
2024 Chairman and Chief Executive Officer (CEO) Pay
| • | Our CEO’s 2024 pay ranked above our peer group median for base salary, and below the 25th percentile for total cash compensation and total direct compensation as compared to 2024 peer group pay. |
Compensation Philosophy and Objectives
| 2. | Annual Bonus – Annual award payable in cash after the completion of the most recent fiscal year, determined based on our corporate financial performance and the achievement of individual objectives; |
Compensation Philosophy and Objectives
| 3. | Long-term equity-based compensation – Equity awards intended to retain our executives and achieve unity of interest between our executives and long-term shareholders; and |
Compensation Philosophy and Objectives
| 4. | Benefit plans designed to promote long-term employment. |
Process for Setting Executive Compensation
Process for Setting Executive Compensation The Committee is responsible for developing, overseeing, and implementing our executive compensation program. The Committee also monitors the results of the program to ensure compensation remains competitive and creates proper incentives to enhance shareholder value. The Committee annually reviews and approves all compensation for the CEO and other NEOs. The Committee has the responsibility to approve and monitor all compensation for our NEOs. Our CEO is responsible for evaluating and reviewing the performance of all the NEOs (other than himself) with the Committee and makes compensation recommendations for base salary, the annual bonus award, any stock award or other special or supplemental benefits to the Committee for those NEOs. The Committee performs the same function for the CEO. The Committee reviews and approves the process and factors used to recommend base salary increases, bonuses and other awards and has the discretion to approve the final awards, based on such factors as it considers relevant. All independent directors also approve the CEO’s compensation. Under its charter, the Committee has the sole authority to retain and terminate compensation consultants or other advisors to assist it with its duties. For 2024, the Committee engaged Frederic W. Cook & Co., Inc. (FWC) as its compensation consultant to advise it on our executive and director compensation programs and to provide it with market compensation data. FWC does not perform any other services for the company. FWC assists the Committee with selecting the members of the company’s compensation peer group, provides the Committee comparative market data on compensation levels for our executive officers and compensation practices and programs of our peer group and advises the Committee on the design of our executive compensation program. The Committee has determined that the work performed for the Committee by FWC in 2024 did not raise any conflict of interest.
Our Compensation Peer Group
Our Compensation Peer Group With the assistance of FWC, the Committee selects a compensation peer group of companies similar in size and business to us. The peer group is used to compare executive compensation levels against companies that have executive positions with responsibilities similar in breadth and scope to ours and have businesses that compete with us for executive talent. The Committee reviews the peer group compensation data prepared by FWC to ensure that our executive compensation program is competitive. The peer group is comprised of 14 companies in the same GICS sub-industry that are comparable to us in terms of revenue and market capitalization. Our peer group for 2024 was unchanged from 2023. In relation to the peer group, we are just above the median measured by revenue. Net income and operating income are above the 75th percentile, while total assets fall just below the median and number of employees falls below the 25th percentile. The following 14 companies comprise the peer group used in connection with evaluating our 2024 executive compensation program:
Our Compensation Peer Group
| Ashland Corporation | H.B. Fuller Company | RPM International Inc. | | Avient Corporation | Ingevity Corporation | Sensient Technologies Corporation | | Axalta Coating | Innospec Inc. | Stepan Company | | Cabot Corporation | Minerals Technologies Inc. | Valvoline Inc. | | FMC Corporation | Quaker Chemical Corporation | |
Base Salary
Base Salary Our base salary structure is designed to encourage internal growth, attract and retain new talent, and reward strong leadership that will sustain our growth and profitability. In determining and setting base salary, the Committee considers various factors, including our past and current performance, the NEOs’ individual contributions to our success throughout their careers, internal pay equity and market data regarding comparable positions within our peer group. For 2024, the Committee reviewed and approved base salary increases as follows: Mr. Paliotti was awarded a 5.4% increase and Mr. Skrobacz was awarded a 3.8% increase effective January 1, 2024. Mr. Jewett was awarded a 5.6% increase effective August 1, 2024; Mr. Hazelgrove was awarded a 3.8% increase and Mr. Gottwald was awarded a 3.6% increase effective September 1, 2024. For each of our NEOs, we review base salary data for comparable executive positions in our peer group to ensure that the base salary rate for each executive is competitive. In general, for most of our executives, we regard a base salary rate within 20% of the 50th percentile (median) of the peer group base salary data as appropriately competitive. The 2024 base salaries for our NEOs ranged from between 86% and 115% of the corresponding peer group median.
Annual Cash Bonus
Annual Cash Bonus The objectives of our annual bonus program for our NEOs (the Executive Bonus Plan) are to encourage and reward the NEOs for their invention, ability, leadership, loyalty, exceptional service and recruiting others who will contribute to our continued success. We have an established history of aligning our executives’ pay with our performance. Our Executive Bonus Plan uses a pre-established formula to determine the maximum bonuses payable to our NEOs. The Committee may exercise negative discretion to reduce the maximum bonus payouts to reflect other financial performance measures, as well as the individual performance of each NEO and any other factors the Committee deems appropriate, as described below.
Executive Bonus Plan Formula
Executive Bonus Plan Formula Our Executive Bonus Plan uses an objective, pre-established formula to determine the initial maximum annual bonuses payable to our NEOs. For each NEO, the initial maximum bonus is equal to a specified percentage of our annual operating profit, up to $2,000,000. The Committee establishes the individual percentage of annual operating profit for each NEO based on each executive’s past and expected individual performance, expected company performance and projected operating profit, each NEO’s position and seniority and internal pay equity considerations. In setting these bonus percentages (and determining the final bonus payouts as described below), the Committee considers the various factors described above and does not target bonuses at a particular percentile or percentile range of the peer group data. No “threshold” or “target” bonus is established for any of the NEOs (as a percentage of base salary or otherwise). We use operating profit as the sole metric for determining the maximum bonuses payable to the NEOs because the Committee believes that operating profit is an important indicator of corporate performance and that management’s focus on operating profit is key to the success of the company. For purposes of the Executive Bonus Plan, annual operating profit is the sum of segment operating profit less corporate, general, and administrative expenses and any special one-time/non-recurring items, which for 2024 was approximately $599 million.(1) While annual operating profit is the sole metric used to determine the initial maximum bonuses, final bonuses may be based on the company’s performance measured against various other financial metrics, as well as the individual performance of each NEO measured against a variety of individual performance metrics. For 2024, the maximum annual bonus percentage for Mr. Gottwald was set at 0.35% of operating profit, at 0.20% for Mr. Paliotti and at 0.15% for the other NEOs in each case up to a maximum annual bonus of $2,000,000. Based on our 2024 operating profit of approximately $599 million, these percentages translated into initial maximum bonuses of $2,000,000 for Mr. Gottwald, $1,198,000 for Mr. Paliotti and $898,500 for Messrs. Hazelgrove, Skrobacz and Jewett.
Final 2024 Bonuses
Final 2024 Bonuses At the end of the year, after the initial maximum bonuses have been determined, the Committee may exercise negative discretion to reduce the bonus for each NEO, based on the recommendations of the CEO (for NEOs other than himself) and any other factors the Committee deems appropriate.
Final 2024 Bonuses
| (1) The 2024 operating profit of approximately $599 million is based on our 2024 operating profit (calculated in accordance with GAAP) of $590 million, excluding a charge of $9 million for the bonus expense. |
Final 2024 Bonuses
The CEO recommends final bonus amounts for the other NEOs to the Committee (not in excess of the maximum) based on an evaluation of our overall financial performance for the year, each NEO’s individual performance, internal pay equity comparisons, comparable peer group compensation data, each NEO’s position and seniority, and any other factors deemed relevant by the CEO. Individual performance is generally evaluated based on the long-term and annual operating plan for the NEO’s area of responsibility, as well as overall corporate initiatives, and may be measured subjectively. The CEO has discretion to select and evaluate the factors that inform the bonus recommendations and in general does not rely on pre-established weightings or quantitative goals or targets with respect to any individual performance measures to determine the final bonuses. The Committee follows a similar process for determining the CEO’s annual bonus. The various company and individual performance factors that informed the final 2024 bonuses for the NEOs are as described below. Company Performance NewMarket had another strong year in 2024. The operating profit for our petroleum additives business was $592 million, compared to $514 million in 2023. Lower operating costs achieved through our ongoing efficiency efforts were one of the key drivers in our operating profit improvement. We are also pleased with the results of our specialty materials business, AMPAC, that we acquired in mid-January 2024. AMPAC reported sales for 2024 of $141 million and operating profit of $17 million, surpassing our pre-acquisition expectations. Our operations generated solid cash flows throughout the year, we funded capital expenditures of $57 million, and we returned approximately $128 million to our shareholders through dividends of $96 million and share repurchases of $32 million. Since our AMPAC acquisition, we made net payments of $373 million on our revolving credit facility. We continued to operate safely throughout the year with a recordable injury rate at 0.77. Individual Performance Mr. Gottwald, President, CEO and Chairman. Under Mr. Gottwald’s leadership, his team maintained focus on managing costs and inventory levels and increasing profitability while continuing to invest in technology. Through these efforts, the company achieved very strong results in operating profit. The R&D team delivered on key projects in 2024 while also making great progress on improving efficiency. Our Commercial teams focused on margin management and profitable business growth. AMPAC was successfully integrated into the business. The Committee considered Mr. Gottwald’s leadership and strong operating results in the evaluation of his compensation. Mr. Paliotti, President of Afton. In 2024, Afton achieved very strong operating results. Mr. Paliotti led the global manufacturing and supply organizations to continue operations safely, effectively and efficiently throughout the year. Under his leadership, the R&D team delivered on 2024 key projects and the Commercial teams drove an increase in profitable new business. Mr. Paliotti is a visible and accessible leader to employees worldwide and consistently demonstrates our culture and values. The Committee considered these factors in the evaluation of Mr. Paliotti’s compensation. Mr. Hazelgrove, Executive VP and CAO. Mr. Hazelgrove led his team in 2024 to help keep our employees safe, healthy and focused on operating effectively through the year. He led his team to successfully integrate AMPAC into the NewMarket family of companies. The HR team focused on hiring, training and retention efforts that resulted in an annual quit rate of approximately 4.6%, which is the same as 2023 and below the reported quit rate within our industry classification (Bureau of Labor Statistics). The IT organization continued to support the business information technology needs of the company and continues to keep our systems secure. The Data Operations team supported the business’ data needs and improved SAP operational efficiency and lowered cost. Mr. Hazelgrove also successfully managed real estate projects with a focus on controlling and reducing costs. The Committee considered Mr. Hazelgrove’s leadership in several areas including his leadership with AMPAC, human resources (HR), information technology (IT), data operations, EHS and real estate in the evaluation of his compensation. Mr. Skrobacz, VP and CFO. Under Mr. Skrobacz’s leadership, the finance organization partnered with and provided valuable solutions to our business segments on strategic initiatives designed to improve expense discipline and reduce costs. Mr. Skrobacz was actively involved and provided strategic support in capital allocation discussions and AMPAC integration activities. He managed through leadership changes within the Finance department to more effectively and efficiently support the business. He successfully managed the company’s balance sheet which allowed for share repurchases and $95.9 million to be returned to shareholders in the form of dividends further increasing shareholder value. The Committee considered Mr. Skrobacz’s effective leadership of the finance organization in the evaluation of his compensation. Mr. Jewett, Executive VP and General Counsel. Mr. Jewett successfully led his team in support of the business’ needs with legal advice and strategic input. Through his leadership, the team successfully managed the cost of environmental matters, reduced legacy liabilities and delivered on several litigation and transactional matters. He worked with leaders across the company to provide valuable legal support on strategic initiatives and he and his team played a key role in the successful closing and integration of AMPAC into the organization. The Committee considered Mr. Jewett’s strong leadership of the Legal Department and his strategic support and advisory role across the organization in the evaluation of his compensation. The final bonuses recommended to and approved by the Committee for each NEO were less than the initial maximum amounts, so that the bonuses payable to each NEO would be consistent with the median total cash compensation level for comparable positions within our peer group and with historical bonus payouts. The final amounts ranged from 28% to 62% of the maximum bonus amounts. With consideration given to company and individual performance, the Committee approved the bonus recommendations of the CEO for NEOs other than himself. The final 2024 bonus amounts as approved by the Committee for each NEO are set forth in the Summary Compensation Table on page 24.
Long-Term Incentive Awards
Long-Term Incentive Awards Our long-term incentive program is designed to retain our executives, recognize and reward our executives for their contributions toward our long-term success, and further align their interests with those of our long-term shareholders by tying a portion of their compensation to the value of our common stock. For equity awards in general, the Committee approves the size of the awards for each NEO in its discretion. The award sizes generally reflect the scope of the duties and responsibilities associated with each NEO’s position and seniority, along with other relevant considerations such as peer group compensation data, internal pay equity, company performance and an executive’s individual contributions, with no particular weight assigned to any factor. Peer group data is used to compare the competitiveness of the stock grants with equity compensation practices at our peer group companies, but the awards are not targeted at a specific percentile or percentile range of the peer group data. For our NEOs, our long-term incentive program for 2024 included a performance element to better align NEO pay with company performance and shareholder interest.
Performance Stock
Performance Stock In 2024, the company granted performance-based stock awards (Performance Stock) with a five-year performance period beginning in January 2024. These Performance Stock grants reward growth in long-term stockholder value through increases in earnings per share (excluding one-time/non-recurring items) (EPS) over a five-year period and are designed to reflect the direct influence of our NEOs on our long-term financial performance. The Committee has selected EPS growth over a five-year period as the performance measure is aligned with the Company’s philosophy of providing solid returns to our shareholders over the long term. Participants may earn between 50% and 100% of the shares of Performance Stock awarded. Each award of Performance Stock will vest only upon satisfaction of certain performance criteria, which shall be achieved only if the company’s earnings per share for the fiscal year ending December 31, 2028 is at least equal to the applicable Performance targets. If the target EPS is achieved at the end of the performance period, each NEO will receive 100% of the performance Stock award. If approximately 80% of the target EPS is achieved, each NEO will receive 50% of the Performance Stock award. We believe that the threshold goal has been established at levels that should be appropriately difficult to attain, and that the target goals will require considerable and increasing collective effort on the part of our employees, including our NEOs, to achieve. Below threshold, 0% of the Performance Stock will vest. Attainment between threshold and target performance parameters is subject to interpolation on a linear basis, and no more than 100% of the Performance Stock award granted may be earned. The 2024 Performance Stock awards as approved by the Committee for each NEO are set forth in the Grants of Plan-Based Awards table of this proxy statement. For 2025, the company granted similar performance-based stock awards with a five-year performance period based on EPS at the end of the performance period.
Grants of Certain Equity Awards Close in Time to the Release of Material
Grants of Certain Equity Awards Close in Time to the Release of Material
Summary Compensation Table
Summary Compensation Table The following table presents information with respect to total compensation of our Chief Executive Officer, our Chief Financial Officer and the three other most highly compensated executive officers of our company, whom we refer to in this proxy statement as the named executive officers, for the fiscal year ended December 31, 2024.
Summary Compensation Table
| Name and Principal Position | Year | Salary (1)($) | Bonus ($) | Stock Awards (2)($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($)(3) | Change in Pension Value and Nonqualified Deferred Compensation Earnings (4)($) | All Other Compensation (5)($) | Total ($) | | Thomas E. Gottwald | 2024 | $1,231,667 | $0 | $360,690 | $0 | $800,000 | $634,465 | $61,583 | $3,088,406 | | President and Chief | 2023 | 1,191,667 | 0 | 302,280 | 0 | 725,000 | 916,567 | 59,583 | 3,195,097 | | Executive Officer | 2022 | 1,157,467 | 0 | 250,428 | 0 | 625,000 | 0 | 57,873 | 2,090,768 | | William Skrobacz | 2024 | $415,000 | $0 | $166,424 | $0 | $250,000 | $260,822 | $20,750 | $1,112,996 | | Vice President and | 2023 | 400,000 | | 101,333 | | 250,000 | 202,310 | 20,000 | 973,643 | | Chief Financial Officer | | | | | | | | | | | Brian D. Paliotti | 2024 | $590,000 | $0 | $332,848 | $0 | $600,000 | $70,032 | $30,500 | $1,623,379 | | President of Afton | 2023 | 560,000 | 0 | 252,473 | 0 | 525,000 | 170,398 | 28,429 | 1,536,300 | | Chemical Corporation | 2022 | 504,667 | 0 | 204,924 | 0 | 425,000 | 0 | 25,233 | 1,159,824 | | Bruce R. | 2024 | $558,500 | $0 | $332,848 | $0 | $560,000 | $314,433 | $27,925 | $1,793,706 | | Hazelgrove, III | 2023 | 540,100 | 0 | 252,473 | 0 | 510,000 | 453,545 | 27,005 | 1,783,123 | | Executive Vice | 2022 | 524,667 | 0 | 182,016 | 0 | 425,000 | 0 | 27,227 | 1,158,910 | | President and Chief | | | | | | | | | | | Administrative Officer | | | | | | | | | | | Bryce D. Jewett, III | 2024 | $460,217 | $0 | $332,848 | $0 | $560,000 | $54,608 | $24,011 | $1,431,683 | | Executive Vice | 2023 | 441,692 | 0 | 202,665 | 0 | 500,000 | 58,026 | 22,084 | 1,224,467 | | President and General Counsel | 2022 | 428,958 | | 159,421 | | 325,000 | 0 | 21,448 | 934,827 |
Summary Compensation Table
| (1) The amounts in this column represent salaries before executive contributions to the Savings Plan. The Savings Plan is a plan qualified under Section 401(a) of the Internal Revenue Code. These amounts differ to the base salary changes described in “Compensation Discussion and Analysis—Base Salary” due to the timing of effective dates for base salary changes. |
Summary Compensation Table
| (2) Represents the aggregate grant date fair value of the performance stock awards made as computed in accordance with FASB ASC Topic 718 and is based on the probable outcome of the performance goals, which we have determined to be target performance. Target performance is also the maximum performance level attainable under the awards. The assumptions used in determining the grant date fair values of the stock are set forth in Note 16 to our consolidated financial statements, included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. |
Summary Compensation Table
| (3) Represents the amounts paid under the Executive Bonus Plan for the year indicated, which incorporates an objective, pre-established performance measure for determining maximum bonus amounts. See “Compensation Discussion and Analysis—Annual Bonus” for additional information regarding the design of the Executive Bonus Plan. |
Summary Compensation Table
| (4) The amounts indicate the aggregate change in the actuarial present value of each named executive officer’s accrued benefit under the Pension Plan, the Excess Benefit Plan and (solely for Mr. Gottwald) the Director Retirement Plan, which collectively we refer to in this proxy statement as the “pension retirement plans.” None of the named executive officers have received above market earnings on any nonqualified deferred compensation plans for any of the years reported in the table. For purposes of computing the actuarial present value of the accrued benefit payable to the named executive officers, we used the same assumptions used for financial reporting purposes under GAAP, including that (a) the retirement age is the normal retirement age (age 65 under the Pension Plan and Excess Benefit Plan and age 60 under the Director Retirement Plan), (b), a 5.625% discount rate for the measurement period ended December 31, 2022, a 5.375% discount rate for the |
Summary Compensation Table
| measurement period ended December 31, 2023 and a 5.875% discount rate for the measurement period ended December 31, 2024, (c) the named executive officer will remain in our employ until he reaches the normal retirement age and (d) payments will be made on a straight-life monthly annuity basis. For a description of the assumptions we used, see Note 18 to our consolidated financial statements and the discussion in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” both of which are included in our annual report on Form 10-K for the fiscal year ended December 31, 2024 and incorporated by reference into this proxy statement. Any decreases in the actuarial present value are shown as $0. |
Summary Compensation Table
| (5) The amounts in this column primarily represent our contributions to the Savings Plan and Excess Benefit Plan for each named executive officer. We credited the following amounts listed in the total column under each of the plans listed below to each named executive officer in 2024: |
Summary Compensation Table
| Name | Savings Plan | Excess Benefit Plan | Total | | Thomas E. Gottwald | $17,250 | $44,333 | $61,583 | | William Skrobacz | 17,250 | 3,500 | 20,750 | | Brian D. Paliotti | 17,250 | 12,250 | 29,500 | | Bruce R. Hazelgrove, III | 17,250 | 10,675 | 27,925 | | Bryce D. Jewett, III | 17,250 | 5,761 | 23,011 |
Summary Compensation Table
For Mr. Paliotti and Mr. Jewett, the amounts in this column also include $1,000 for company contributions to the NEO’s health savings account.
Grants of Plan-Based Awards
Grants of Plan-Based Awards The following table sets forth information concerning awards under our Executive Bonus Plan and individual performance stock grants made during the year ended December 31, 2024 to the named executive officers.
Grants of Plan-Based Awards
| | | Potential Future Payouts Under Non-Equity Incentive Plan Awards (1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards (2) | | Grant Date Fair Value of Stock Awards (3) | | Name | Grant Date | Threshold | Target | Maximum | Threshold (# of shares) | Target (# of shares) | | | Thomas E. Gottwald | | | | | | | | | Bonus Program | — | — | $800,000 | $2,000,000 | | | | | Performance Stock | 3/5/2024 | | | | 285 | 570 | $360,690 | | William Skrobacz | | | | | | | | | Bonus Program | — | — | 250,000 | 2,000,000 | | | | | Performance Stock | 3/5/2024 | | | | 132 | 263 | 166,424 | | Brian D. Paliotti | | | | | | | | | Bonus Program | — | — | 600,000 | 2,000,000 | | | | | Performance Stock | 3/5/2024 | | | | 263 | 526 | 332,848 | | Bruce R. Hazelgrove, III | | | | | | | | | Bonus Program | — | — | 560,000 | 2,000,000 | | | | | Performance Stock | 3/5/2024 | | | | 263 | 526 | 332,848 | | Bryce D. Jewett, III | | | | | | | | | Bonus Program | — | — | 560,000 | 2,000,000 | | | | | Performance Stock | 3/5/2024 | | | | 263 | 526 | 332,848 |
Grants of Plan-Based Awards
| (1) This column reflects the target and maximum amounts potentially payable under the Executive Bonus Plan. The maximum payout is merely the individual dollar limit established by the Executive Bonus Plan, and does not reflect the Committee’s evaluation of each individual’s performance against goals for the year. Maximum bonuses under the Executive Bonus Plan are determined based on a percentage assigned to each executive of our company’s operating profit for the year. There are no threshold or target levels of performance established with respect to the Executive Bonus Plan. The target amount shown above is a representative amount based on the previous fiscal year’s performance. See “Compensation Discussion and Analysis—Annual Cash Bonuses” for discussion of the Executive Bonus Plan and amounts actually earned in 2024. |
Grants of Plan-Based Awards
| (2) This column reflects the threshold and target amount of shares distributable under performance share awards granted on March 5, 2024 under our 2023 Incentive Compensation and Stock Plan. Awards will vest on the achievement of specified levels of earnings per share in the 2028 fiscal year. Target performance is the maximum performance level attainable under the awards. |
Grants of Plan-Based Awards
| (3) Amounts included in this column represent the grant date fair value recognized with respect to the 2024 fiscal year in accordance with ASC 718 and is based on the probably outcome of performance goals, which we have determined to be target performance. For a discussion of valuation assumptions, see Note 16 to our consolidated financial statements, included in our Annual Report on Form 10-K for the year ended December 31, 2024. |
Outstanding Equity Awards at Fiscal Year-End
Outstanding Equity Awards at Fiscal Year-End The following table presents information concerning the number and value of nonvested restricted stock and performance stock for the named executive officers outstanding as of the end of the fiscal year ended December 31, 2024. There were no other equity awards such as options, stock appreciation rights (SARs) or similar instruments or incentive plan awards for the named executive officers outstanding as of the end of the fiscal year ended December 31, 2024.
Outstanding Equity Awards at Fiscal Year-End
| | Stock Awards | | | | | Name | Number of Shares That Have Not Vested (#) | Market Value of Shares That Have Not Vested (7) ($) | Equity Incentive Plan Awards – Number of Unearned Shares That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares That Have Not Vested (7) ($) | | Thomas E. Gottwald | 0 | $0 | 610(1) | $322,294 | | | | | 655(2) | 346,069 | | | | | 798(3) | 421,623 | | | | | 880(4) | 464,948 | | | | | 570(5) | 301,160 | | William Skrobacz | 22(6) | 11,624 | | | | | 25(6) | 13,209 | | | | | 30(6) | 15,851 | | | | | | | 295(4) | 155,863 | | | | | 263(5) | 138,956 | | Brian D. Paliotti | 0 | 0 | 500(1) | 264,175 | | | | | 535(2) | 282,667 | | | | | 653(3) | 345,013 | | | | | 735(4) | 388,337 | | | | | 526(5) | 277,912 | | Bruce R. Hazelgrove, III | 0 | 0 | 445(1) | 235,116 | | | | | 475(2) | 250,966 | | | | | 580(3) | 306,443 | | | | | 735(4) | 388,337 | | | | | 526(5) | 277,912 | | Bryce D. Jewett, III | 0 | 0 | 415(2) | 219,265 | | | | | 508(3) | 268,402 | | | | | 590(4) | 311,727 | | | | | 526(5) | 277,912 |
Outstanding Equity Awards at Fiscal Year-End
| (1) Represent performance stock granted on February 25, 2020, which vest in full as determined by the Committee based on the Company’s attainment of pre-established earnings per share targets as of December 31, 2024 with Committee evaluation of performance to be made after the close of the 2024 fiscal year. |
Outstanding Equity Awards at Fiscal Year-End
| (2) Represent performance stock granted on February 19, 2021, which vest in full as determined by the Committee based on the Company’s attainment of pre-established earnings per share targets as of December 31, 2025 with Committee evaluation of performance to be made after the close of the 2025 fiscal year. |
Outstanding Equity Awards at Fiscal Year-End
| (3) Represent performance stock granted on February 25, 2022, which vest in full as determined by the Committee based on the Company’s attainment of pre-established earnings per share targets as of December 31, 2026 with Committee evaluation of performance to be made after the close of the 2026 fiscal year. |
Outstanding Equity Awards at Fiscal Year-End
| (4) Represent performance stock granted on February 28, 2023, which vest in full as determined by the Committee based on the Company’s attainment of pre-established earnings per share targets as of December 31, 2027 with Committee evaluation of performance to be made after the close of the 2027 fiscal year. |
Outstanding Equity Awards at Fiscal Year-End
| (5) Represent performance stock granted on March 5, 2024, which vest in full as determined by the Committee based on the Company’s attainment of pre-established earnings per share targets as of December 31, 2028 with the Committee evaluation of performance to be made after the close of the 2028 fiscal year. |
Outstanding Equity Awards at Fiscal Year-End
| (6) Reflect restricted stock granted February 25, 2020 (22), February 19, 2021 (25) and February 25, 2022 (30), which will vest on the fifth anniversary of such effective date. |
Outstanding Equity Awards at Fiscal Year-End
| (7) The market value is based on the last sales price of our common stock as reported by the NYSE on December 31, 2024, which was $528.35. |
Options Exercised/Stock Vested During Fiscal 2024
Options Exercised/Stock Vested During Fiscal 2024 The following table presents information concerning the number and value of stock awards vested for the named executive officers during the fiscal year ended December 31, 2024.
Options Exercised/Stock Vested During Fiscal 2024
| | Stock awards | | | Name | Number of shares acquired on vesting (#) (1) | Value realized on vesting (2) | | Thomas E. Gottwald | 625 | $386,994 | | William Skrobacz | 25 | 15,908 | | Brian D. Paliotti | 437 | 270,586 | | Bruce R. Hazelgrove, III | 437 | 270,586 | | Bryce D. Jewett, III | 0 | 0 |
Options Exercised/Stock Vested During Fiscal 2024
| (1) The shares reported for Messrs. Gottwald, Paliotti and Hazelgrove reflect the vesting on February 22, 2024 of performance stock granted on February 27, 2019. The shares reported for Mr. Skrobacz reflect the vesting on February 27, 2024 of shares of restricted stock granted on February 27, 2019. |
Options Exercised/Stock Vested During Fiscal 2024
| (2) The value realized is equal to the number of shares vested, multiplied by the closing market price of the company’s common stock on the vesting date. |
Pension Benefits
Pension Benefits The following table presents information as of December 31, 2024 concerning each defined benefit plan of our company that provides for payments or other benefits to the named executive officers at, following or in connection with retirement:
Pension Benefits
| Name | Plan Name | Number of Years Credited Service (#) | Present Value of Accumulated Benefit ($) | Payments During Last Fiscal Year ($) | | Thomas E. Gottwald | Pension Plan Excess Benefit Plan (Pension Plan Component) | 33 33(1) (1) | $1,842,276 6,019,945 | $0 0 | | | Director Retirement Plan(2) | n/a | 131,160 | 0 | | William Skrobacz | Pension Plan Excess Benefit Plan (Pension Plan Component) | 14 14 | 700,627 240,931 | 0 0 | | Brian D. Paliotti | Pension Plan Excess Benefit Plan (Pension Plan Component) | 17 17 | 354,341 453,776 | 0 0 | | Bruce R. Hazelgrove, III | Pension Plan Excess Benefit Plan (Pension Plan Component) | 28 28 | 1,624,060 1,754,909 | 0 0 | | Bryce D. Jewett, III | Pension Plan Excess Benefit Plan (Pension Plan Component) | 4 4 | 102,082 93,406 | 0 0 |
Pension Benefits
| (1) As of December 31, 2024, Mr. Gottwald had 38 years of service with our company and affiliate or predecessor employers, but only 33 years were applicable as credits for service under the Pension Plan and Excess Benefit Plan. Mr. Gottwald could not apply his full 38 years of service with our company and affiliate or predecessor employers because he had not continuously worked for our company and affiliate or predecessor employers for 38 years. For a period of time, he worked for an entity unrelated to our company and affiliate or predecessor employers. |
Pension Benefits
| (2) In exchange for his services as a director, Mr. Gottwald is eligible to participate in our Director Retirement Plan, which pays a lifetime benefit of $12,000 per year upon an eligible director’s retirement or on after the age of 60, regardless of years of service. See “Compensation of Directors—Directors’ Retirement Benefits” on page 11. |
Pension Benefits
For purposes of computing the actuarial present value of the accrued benefit payable to the named executive officers, we used the same assumptions used for financial reporting purposes under GAAP, including that (a) the retirement age is the normal retirement age (age 65 under the Pension Plan and Excess Benefit Plan and age 60 under the Director Retirement Plan), (b) a 5.875% discount rate for the measurement period ended December 31, 2024, (c) the named executive officer will remain in our employ until he reaches the normal retirement age and (d) payments will be made on a straight-life monthly annuity basis. For a description of the assumptions we used, see Note 18 to our consolidated financial statements and the discussion in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” both of which are included in our annual report on Form 10-K for the fiscal year ended December 31, 2024 and incorporated by reference into this proxy statement.
Nonqualified Deferred Compensation
Nonqualified Deferred Compensation The following table presents information concerning the Savings Plan component of our Excess Benefit Plan, which provides for the deferral of compensation paid to or earned by the named executive officers on a basis that is not tax qualified. For a discussion of our Excess Benefit Plan, see “Pension Benefits—Excess Benefit Plan” on page 30.
Nonqualified Deferred Compensation
| Name | Executive Contributions in Last FY ($) | Registrant Contributions in Last FY(1) ($) | Aggregate Earnings in Last FY ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last FYE ($) | | Thomas E. Gottwald | $0 | $44,333 | $(240,289) | $0 | $7,279,676 | | William Skrobacz | 0 | 3,500 | (166) | 0 | 6,924 | | Brian D. Paliotti | 0 | 12,250 | (3,156) | 0 | 98,480 | | Bruce R. Hazelgrove, III | 0 | 10,675 | (7,523) | 0 | 230,543 | | Bryce D. Jewett, III | 0 | 5,761 | (1,025) | 0 | 35,468 |
Nonqualified Deferred Compensation
| (1) For further discussion, see footnote 5 under the Summary Compensation Table on page 24. |
Potential Payments Upon Termination or Change in Control
Potential Payments Upon Termination or Change in Control We have not entered into any employment, severance, change-in-control or other contract, agreement, plan or arrangement, whether written or unwritten, that provides for payment(s) to any of our named executive officers, at, following, or in connection with any termination of an executive officer’s employment or a change in control of the company other than (i) benefits and payments previously disclosed in the Pension Plan and Nonqualified Deferred Compensation Plan tables above, in which all of our named executive officers are currently 100% vested, other than Mr. Jewett, who joined NewMarket in 2020, and which are generally payable on any termination of a named executive officer’s employment; (ii) employee benefit plans and arrangements that do not discriminate in scope, terms or operation in favor of our executive officers and that are generally available to all of our salaried employees; and (iii) the long term incentive awards, which provide for accelerated vesting on termination due to death or disability, and, for Performance Stock awards, elimination of service (but not performance) vesting requirements on retirement, and, for awards granted after 2023 that are not assumed or substituted in connection with a change in control of our company, specified vesting criteria, each as described below. The restricted stock and performance stock awards granted as a part of our long-term incentive program typically include a service-based vesting requirement. For a discussion of these awards, see “Compensation Discussion and Analysis—Long Term Incentive Awards” on page 20. Any unvested restricted stock awards held by an NEO upon retirement or other termination of employment, other than due to death or disability, prior to the vesting date will be forfeited. However, such awards will vest in full upon an NEO’s termination due to death or disability prior to the vesting date. Any unvested performance stock held by an NEO upon termination of employment, other than due to retirement, death or disability, prior to the vesting date, will be forfeited. However, such awards will vest in part upon an NEO’s termination due to death or disability prior to the vesting date. The performance stock that vests on an NEO’s death or disability equals the number of shares of performance stock awarded, times the ratio of: (x) the number of days elapsed since the start of the performance period and prior to the NEO’s death or disability, over (y) the total number of days in the performance period. Upon a participant’s retirement, a percentage of the performance stock will be forfeited based on the number of days remaining in the service period. Remaining shares of performance stock that are not forfeited upon retirement will no longer be subject to service-based vesting requirements, but shall remain subject to the performance requirements, and therefore will not vest unless and until such performance requirements are met. “Retirement” for this purpose means the participant terminates employment under circumstances entitling the participant to participate in our employee benefit programs for retirees. Our 2023 Incentive Compensation and Stock Plan (the 2023 Plan) provides specified vesting criteria on a change in control of our company (as defined in the Plan) for awards granted after 2023 that are not assumed in connection with a change in control. The table below quantifies the estimated benefit to our NEOs in connection with such a trigger event occurring on the last business day of our 2024 fiscal year and based on a share price of $528.35, the closing price of our common stock on December 31, 2024.
Potential Payments Upon Termination or Change in Control
| Name | Retirement(1) | Disability | Death | Involuntary Termination in Connection with Change in Control(2) | | Thomas E. Gottwald | | | | | | Pro rata vesting of performance stock | $0 | $1,098,301 | $1,098,301 | | | Vesting of performance stock | | | | $301,160 | | William Skrobacz | | | | | | Pro rata vesting of performance stock | 0 | 90,121 | 90,121 | | | Vesting of restricted stock | | 40,683 | 40,683 | | | Vesting of performance stock | | | | 138,956 | | Brian D. Paliotti | | | | | | Pro rata vesting of performance stock | 0 | 908,203 | 908,203 | | | Vesting of performance stock | | | | 277,912 | | Bruce R. Hazelgrove, III | | | | | | Pro rata vesting of performance stock | 0 | 830,641 | 830,641 | | | Vesting of performance stock | | | | 277,912 | | Bryce D. Jewett, III | | | | | | Pro rata vesting of performance stock | 0 | 516,696 | 516,696 | | | Vesting of performance stock | | | | 277,912 |
Potential Payments Upon Termination or Change in Control
| (1) Performance stock awards vest on a pro-rata basis at retirement, but remain subject to performance criteria. Based on a retirement date of December 31, 2024 and a maximum payout for such awards at the end of the performance period, each NEO would be entitled to the following – Mr. Gottwald $1,098,301; Mr. Skrobacz $90,121; Mr. Paliotti $908,204; Mr. Hazelgrove $830,642; and Mr. Jewett $516,696. Unvested shares of restricted stock are forfeited upon retirement. |
Potential Payments Upon Termination or Change in Control
| (2) Amounts assume target performance and a change in control and involuntary termination without cause or for good reason (as such terms are defined in the 2023 Plan) on December 31, 2024. Awards under the 2023 Plan vest based on actual performance determined through the change in control, or target performance if actual performance is not determinable, with such vesting to occur if (a) an award is not assumed or substituted in the change in control or (b) the participant experiences an involuntary termination without cause or for good reason within 12 months of the change in control. |
CEO Pay Ratio
CEO Pay Ratio As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the median annual total compensation of our employees and the annual total compensation of Mr. Thomas E. Gottwald, our Chairman, President and Chief Executive Officer (CEO).
CEO Pay Ratio
| Median employee total annual compensation: | $127,813 | | CEO total annual compensation: | $3,112,127 | | Ratio of CEO total annual compensation to the median employee: | 24:1 |
CEO Pay Ratio
We determined our employee population on December 31, 2024 and, at that time, our employee population consisted of approximately 2,083 individuals with approximately 56% of these individuals located in the United States and 44% located in non-US locations in Europe, Asia Pacific, India, Latin America, Canada and the Middle East. After taking into consideration the Item 402(u)(4)(ii) “de minimis” exemption, we excluded 2 employees (0.2%) from the following 2 non-US locations: Netherlands (1 employee), South Africa (1 employee). The resulting employee population consisted of approximately 2,081 individuals. In accordance with SEC requirements, to identify the median employee, we used “annual taxable compensation” as a consistently applied compensation measure (CACM). Considering the variety of pay elements in each of our geographic locations, we determined this measure would provide the most consistent and accurate estimate of total compensation. We obtained and examined “annual taxable compensation” supplied by our payroll provider for each of our geographic locations using the 12-month period ending December 31, 2024. For permanent employees who worked less than a full year, we annualized their pay based on days worked during the year. We included part-time and temporary employees in our population but we did not annualize pay for these employees. We then converted non-US compensation to USD currency using average exchange rates over the same 12-month period. We did not apply any cost-of-living adjustments in identifying the median employee. After identifying the median employee, we calculated that individual’s total annual compensation as defined by the Summary Compensation Table (SCT) and also included the value of health care benefits (approximately $17,590). This value was then compared to the value of the CEO’s pay as referenced in the SCT plus the value of health care benefits (approximately $23,722). The median employee and CEO are eligible for similar health care programs with similar benefit values. We believe this ratio is a reasonable estimate calculated in a manner consistent with Item 402(u).
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE
Pay versus Performance
Pay versus Performance The following table shows the past five fiscal years’ total compensation for our named executive officers as set forth in the Summary Compensation Table, the total compensation actually paid (CAP) to our named executive officers, our total shareholder return, our peer group’s total shareholder return over the same period, our net income, and our operating profit as it is defined for our Executive Bonus Plan.
Fiscal Year 2024 Pay versus Performance Table
Fiscal Year 2024 Pay versus Performance Table
Fiscal Year 2024 Pay versus Performance Table
| Year | Summary compensation table total for CEO (1) ($) | Compensation actually paid to CEO (3) ($) | Average summary compensation table total for other NEOs (2) ($) | Average compensation actually paid to other NEOs (3) ($) | Total shareholder return (4) ($) | Peer group total shareholder return (4) ($) | Net income (in thousands) ($) | Operating Profit(5) (in thousands) ($) | | 2024 | 3,088,406 | 2,538,195 | 1,490,441 | 1,326,598 | 121.16 | 126.04 | 462,413 | 599,000 | | 2023 | 3,195,097 | 3,276,771 | 1,379,383 | 1,653,526 | 122.96 | 128.28 | 388,864 | 493,000 | | 2022 | 2,090,768 | 2,185,637 | 1,157,780 | 1,210,032 | 68.64 | 111.65 | 279,538 | 363,000 | | 2021 | 2,469,929 | 2,017,197 | 1,280,518 | 1,089,491 | 73.56 | 148.60 | 190,908 | 266,000 | | 2020 | 3,149,426 | 1,847,089 | 1,452,162 | 905,376 | 83.52 | 116.33 | 270,568 | 319,000 |
Fiscal Year 2024 Pay versus Performance Table
| (1) The amounts in this column reflect the summary compensation table totals for Mr. Gottwald for fiscal years 2024, 2023, 2022, 2021 and 2020. |
Fiscal Year 2024 Pay versus Performance Table
| (2) The amounts in this column reflect the average summary compensation totals for our non-CEO NEOs. For 2024 and 2023 this includes Messrs. Paliotti, Hazelgrove, Jewett and Skrobacz, for 2022 and 2021 this includes Mrs. Regina A. Harm and Messrs. Paliotti, Hazelgrove and Jewett. For 2020, this includes Mrs. Harm, Messrs. Paliotti, Hazelgrove and M. Rudolph West. |
Fiscal Year 2024 Pay versus Performance Table
| (3) SEC rules require certain adjustments be made to the Summary Compensation Table totals to determine compensation “actually paid” as reported in the Pay versus Performance table. The following tables detail these adjustments: |
Fiscal Year 2024 Pay versus Performance Table
| Year | Executives | Summary Compensation Table Total ($) | Deduct Reported Change in Actuarial Present Value of Pension Benefits (a) ($) | Add Pension Benefit Adjustments (b) ($) | Deduct Reported Value of Equity Awards (c) ($) | Add Equity Award Adjustments (d) ($) | Compensation Actually Paid ($) | | 2024 | CEO | 3,088,406 | 634,465 | 115,003 | 360,690 | 329,941 | 2,538,195 | | | Other NEOs | 1,490,441 | 174,974 | 51,292 | 291,242 | 251,081 | 1,326,598 |
Fiscal Year 2024 Pay versus Performance Table
| (a) The amounts in this column represent the amounts reported in the “Change in Pension Value and Non-Qualified Deferred Compensation Earnings” column of the Summary Compensation Table. |
Fiscal Year 2024 Pay versus Performance Table
| (b) The total pension value adjustments include the aggregate of two components: (i) the actuarially determined service cost for services rendered by the executive (the “service cost”); and (ii) the entire cost of benefits granted in a plan amendment (or initiation) that are attributed by the benefit formula to services rendered in periods prior to the plan amendment or initiation (the “prior service cost”), in each case, calculated in accordance with U.S. GAAP. The amounts deducted or added in calculating the pension value adjustments are as follows: |
Fiscal Year 2024 Pay versus Performance Table
| Year | Executives | Service Cost ($) | Prior Service Cost ($) | Total Pension Value Adjustment ($) | | 2024 | CEO | 115,003 | 0 | 115,003 | | | Other NEOs | 51,292 | 0 | 51,292 |
Fiscal Year 2024 Pay versus Performance Table
| (c) The amounts in this column represent the grant date fair value of equity awards as reported in the “Stock Awards” column of the Summary Compensation Table. |
Fiscal Year 2024 Pay versus Performance Table
| (d) The equity award adjustments include the addition (or subtraction, as applicable) of the following: |
Fiscal Year 2024 Pay versus Performance Table
| (i) the year-end fair value of any equity awards granted that are outstanding and unvested as of the end of the stated year; |
Fiscal Year 2024 Pay versus Performance Table
| (ii) the amount of change in fair value as of the end of the stated year (from the end of the prior fiscal year) of any awards granted in prior years that are outstanding and unvested as of the end of the stated year; |
Fiscal Year 2024 Pay versus Performance Table
| (iii) | for awards that are granted and vest in the same year, the fair value as of the vesting date; |
Fiscal Year 2024 Pay versus Performance Table
| (iv) for awards granted in prior years that vest in the stated year, the amount equal to the change in fair value as of the vesting date (from the end of the prior fiscal year); |
Fiscal Year 2024 Pay versus Performance Table
| (v) for awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the stated year, a deduction for the amount equal to the fair value at the end of the prior fiscal year; and |
Fiscal Year 2024 Pay versus Performance Table
| (vi) the dollar value of any dividends or other earnings paid on equity awards in the stated year prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total compensation for the stated year. |
Fiscal Year 2024 Pay versus Performance Table
The amounts deducted or added in calculating the equity award adjustments are as follows:
Fiscal Year 2024 Pay versus Performance Table
| Year | Executive | Year end fair value of equity awards granted during the year ($) | Year over year change in fair value of outstanding and unvested equity awards ($) | Fair value as of vesting date of equity awards granted and vested in the year ($) | Year over year change in fair value of equity awards granted in prior years that vested in the year ($) | Fair value at the end of the prior year of equity awards that failed to meet vesting conditions in the year ($) | Value of dividends or other earnings paid on stock or option awards not otherwise reflected in fair value or total compensation ($) | Total equity award adjustments ($) | | 2024 | CEO | 301,160 | (51,444) | 0 | 45,850 | 0 | 34,376 | 329,941 | | | Other NEOs | 243,173 | (28,593) | 0 | 16,595 | 0 | 19,906 | 251,081 |
Fiscal Year 2024 Pay versus Performance Table
| (4) Total shareholder return (TSR) is determined based on the value of an initial fixed investment of $100. The peer group TSR represents cumulative, weighted TSR of the S&P 1500 Specialty Chemicals Index |
Fiscal Year 2024 Pay versus Performance Table
| (5) The 2024 operating profit of approximately $599 million is based on our 2024 operating profit (calculated in accordance with GAAP) of $590 million, excluding a charge of $9 million for the bonus expense. The 2023 operating profit of approximately $493 million is based on our 2023 operating profit (calculated in accordance with GAAP) of $483 million, excluding a charge of $10 million for the bonus expense. The 2022 operating profit of approximately $363 million is based on our 2022 operating profit (calculated in accordance with GAAP) of $355 million, excluding a charge of $8 million for the bonus expense. The 2021 operating profit of approximately $266 million is based on our 2021 operating profit (calculated in accordance with GAAP) of $258 million, excluding a charge of $8 million for the bonus expense. The 2020 operating profit of approximately $319 million is based on our 2020 operating profit (calculated in accordance with GAAP) of $312 million, excluding a charge of $7 million for the bonus expense. |